New York, NY (PRWEB) April 23, 2014
Traditional merchants in the Fish and Seafood Wholesaling industry face stiff competition from manufacturers' sales branches and offices (MSBOs) of vertically integrated fishing or processing companies, similar to the wholesaling sector overall. Known as wholesale bypass, this competition occurs when a producer (e.g. fish processor) also performs the wholesaling function. By cutting out the traditional wholesaling middleman, MSBOs retain some of the revenue that would otherwise be lost when selling through a merchant wholesaler. End markets also benefit by paying less for inventory, as goods sourced from an MSBO will typically exhibit a lower markup than goods sourced through traditional merchants because of MSBOs' vertically integrated economies of scale.
Outside of MSBO competition, there are some positive trends for merchant wholesalers. According to IBISWorld Industry Analyst Antal Neville, “Clinical studies pointing toward the benefits of fish consumption during pregnancy have become influential, increasing demand for seafood products.” Also, a report by the American Heart Association found that seafood consumption might reduce the risk of heart disease. Along with omega-3 fatty acids, fish and seafood provide other essential nutrients such as iodine, iron, zinc and niacin. However, these benefits are often overshadowed by consumer fears about mercury levels in fish. At least two 2010 studies found that women were aware of the potential risks of mercury consumption but could not recall many of the reported benefits.
Beyond health perceptions, per capita seafood consumption and the price of seafood constitute this industry's main revenue drivers. “As unemployment falls and per capita disposable income increases, spending will also rise,” says Neville. Consumers will be more likely to purchase fish and seafood as spending grows, even though it is relatively more expensive than other meats. As seafood consumption increases, prices are also expected to rise, thereby growing revenue from recessionary lows and bolstering wholesalers' profit margins. Postrecession gains are expected to offset 2009 losses, and IBISWorld forecasts industry revenue to grow an annualized 3.5% off of a low base in the five years to 2014. In 2014 alone, renewed consumer spending and rising fish and seafood prices are expected to lead revenue to grow 0.3% to an estimated $13.7 billion. Through 2019, industry revenue is projected to increase.
For more information, visit IBISWorld’s Fish & Seafood Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Fish & Seafood Wholesaling industry primarily wholesale fish and seafood for human consumption. Canned or packaged frozen products are excluded from the industry (see IBISWorld reports 42449 and 42442, respectively).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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